Control Of RBS Passes To British Government

In case you missed it, majority control of the Royal Bank of Scotland passed into the hands of the British Government today. The government now owns 57.9% of the bank.

Royal Bank had been trying to raise new equity capital but its attempt failed when just 0.24 % of the shares offered were picked up by the public. The government then stepped in and purchased the unsubscribed shares.

The outcome is not surprising; however, the almost complete disinterest in the share offering is sobering. It seems to be a pretty profound statement at to the interest of private investors in banks. Once again, a market statement was made here and it was emphatic in voting no confidence in the sector. It will probably be a long time before the western governments are able to realize the “profits” they claim will accrue to their nationalization efforts.